Tribunal grants waiver for Rs. 4.62 Crores pre-deposit on ineligible cenvat credit.

The Tribunal granted the appellant's request for a waiver of pre-deposit of approximately Rs. 4.62 Crores, relating to ineligible cenvat credit with interest and penalty. The Tribunal considered the definition of input service under the Cenvat Credit Rules, finding that the appellant had availed services for setting up a new plant, justifying the waiver. As a result, the recovery of the amounts was stayed pending the appeal's resolution.

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Issues:
1. Waiver of pre-deposit of confirmed ineligible cenvat credit with interest and penalty.

Analysis:
The judgment pertains to a stay petition seeking the waiver of pre-deposit of approximately Rs. 4.62 Crores, confirmed as ineligible cenvat credit availed with interest and an equivalent amount of penalty. The adjudicating authority confirmed the amounts on the grounds that the appellant availed cenvat credit of service tax paid by service providers for setting up a plant for manufacturing final products on which Central Excise duty is discharged.

The learned counsel referred to the original order and the services on which service tax was paid and credit availed. Reference was made to precedents like Navaratna S.G. Highway Prop. Pvt. Limited and Gujarat State Petronet Limited. The Additional Commissioner argued that credit cannot be allowed for services rendered towards immovable property, such as erection of transmission towers, which are deemed ineligible.

Upon careful consideration and perusal of the records, the Tribunal examined the definition of input service under Rule 2(l) of the Cenvat Credit Rules, 2004. The definition includes services used directly or indirectly in or in relation to manufacturing final products, as well as services used in relation to setting up a new plant. The Tribunal found that the appellant had availed services from providers who discharged service tax on such services for setting up a new plant. Consequently, the Tribunal held that the appellant had established a prima facie strong case for the waiver of pre-deposit. Therefore, the application for the waiver was allowed, and recovery of the amounts stayed pending the appeal's disposal.

The judgment was pronounced in court, granting the waiver of pre-deposit and staying the recovery of the amounts until the appeal is resolved.

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